Post Session: Quick Review

Indian markets extending their losing streak for the fifth consecutive session, made it a whole week of decline, suffering serious drubbing with major averages losing their crucial psychological levels. Traders remained concerned not only on some disappointing corporate earnings but also ahead of the outcome of the Bihar election results. The early gains that were induced by the World Bank retaining its India growth forecast for 2015-16 saying it will continue to grow, faded amid intense selling pressure. In its latest ‘India Development Update’ World Bank expects India's economic growth to be at 7.5% in 2015-16, followed by a further acceleration to 7.8% in 2016-17 and 7.9% in 2017-18. Moody’s Analytics too has said that the Indian economy is likely to grow at 7.6% this year and in 2016 while closing of negative output growth is going to be difficult due to external headwinds and the government failing to deliver on reforms.

On the global front, the US markets succumbed to weaker-than-expected readings on gross domestic product and pending home sales. While most of the Asian markets ended in red too, the Japanese markets posted gains of around a percent, as investors looked past a Bank of Japan decision to refrain from adding to monetary easing and focused on earnings. Meanwhile, Government data showed Japan’s consumer prices excluding fresh food fell 0.1 percent in September from a year earlier. The European markets made mostly a positive start boosted by Spanish GDP numbers, which showed a slight easing on growth in the third quarter to a still-impressive 0.8 per cent - by far the best in Europe.

Back home, bout of volatility which was witnessed in early noon trade suddenly took the shape of correction, as key benchmark indices slumped in the late trade to their lowest level after showing some gains in mid-morning trade. Sharp fall in ITC and infra major L&T weighed on the markets. Though L&T Q2 numbers were mostly in line with estimates but the company cut its order inflow guidance to 5-7 per cent, from 15 per cent earlier that took the stocks lower. There was some buzz in the aviation stocks, after the government released the new draft aviation policy for inputs from stakeholders before finalisation. The policy dwells on upgrade of airports, better regional connectivity, easing of norms for flying abroad, further liberalisation in open skies regime, development of cargo business, chopper services, attracting investments in maintenance sector, ground handling and security. Spicejet by the end was locked in upper circuit, while JetAirways too surged by over 11 percent. Banking stocks attracted strong buying after suffering a selloff in the previous few sessions, supported by some good earnings. After good numbers of Yes Bank ICICI Bank came up with inline estimates numbers, the bank’s standalone profit rose by 12 percent year-on-year to Rs 3,030 crore. Yes Bank, ICICI Bank and Kotak Mahindra Bank gained over 1.5-3.5 per cent.

Power generation and distribution stocks too came into action after the Delhi High Court upheld the discoms' plea against a CAG audit. The court said that CAG does not have the jurisdiction or power to audit accounts of private discoms. Though, Reliance Infra surged by around 5%, Tata Power ended lower by around 1.5%.

The BSE Sensex ended at 26623.81, down by 214.33 points or 0.80% after trading in a range of 26585.20 and 26942.29. There were 11 stocks on gainers side against 19 stocks on decliners side on the index. (Provisional)

The broader indices too ended in red; the BSE Mid cap index was down by 0.20%, while Small cap index lost 0.75%. (Provisional)

The gaining sectoral indices on the BSE were Bankex up by 0.75%, Consumer Durables up by 0.60%, Power up by 0.23%, while Capital Goods down by 2.87%, FMCG down by 2.24%, Auto down by 1.19%, Metal down by 1.12%, Realty down by 1.07% were the losing indices on BSE. (Provisional)

The top gainers on the Sensex were NTPC up by 3.36%, ICICI Bank up by 2.10%, Dr. Reddys Lab up by 1.57%, Axis Bank up by 1.08% and Sun Pharma Inds. up by 0.95%. On the flip side, Vedanta down by 6.79%, Larsen & Toubro down by 4.32%, Mahindra & Mahindra down by 4.09%, ITC down by 4.07% and BHEL down by 2.39% were the top losers. (Provisional)

Meanwhile, in a move that could help boost dollar inflows into the country, the Reserve Bank of India (RBI) has notified that non-resident Indians (NRIs) can opt to invest in the National Pension System (NPS). In its notification the central bank has said that the subscription amounts shall be paid by NRIs either by inward remittance through normal banking channels or out of funds held in their NRE/FCNR/NRO account. There shall be no restriction on repatriation of the annuity or accumulated savings.

RBI said that with a view to enabling NRIs’ access to old age income security, it has now been decided, in consultation with the Government of India, to enable NPS as an investment option for NRIs under FEMA (foreign exchange management act) 1999.

NRIs can now subscribe to the pension scheme, which is governed and administered by the Pension Fund Regulatory and Development Authority. Minimum annual subscription under NPS is Rs 6,000, while allocation to equities is capped at 50% of investment. NPS investments mature when the investor turns 60. If the corpus is less than Rs 2 lakh, the entire sum can be withdrawn. If it is more, the subscriber must put at least 40% of the corpus into an annuity to get a monthly pension. However, there is no ceiling on the investment amount.

NPS is an easily accessible, low cost, tax-efficient, flexible and portable retirement savings account. Under the NPS, the individual contributes to his retirement account. The funds contributed by the Subscribers are invested by the PFRDA registered Pension Fund Managers (PFMs) as per the investment guidelines prescribed by PFRDA. The investment guidelines are framed in such a manner that the portfolio is adequately diversified across financial securities so that there is minimal impact on the returns on subscribers contributions even if there is a market downturn, by ensuring a judicious mix of investment instruments like Government securities, corporate bonds and equities. At present, there are 9.6 million NPS subscribers with the total assets under management at almost Rs.88,000 crore.

The CNX Nifty ended at 8056.35, down by 55.40 points or 0.68% after trading in a range of 8044.40 and 8146.10. There were 16 stocks in green against 34 stocks in red on the index. (Provisional)

The top gainers on Nifty were Kotak Mahindra Bank up by 3.54%, NTPC up by 3.48%, ICICI Bank up by 2.01%, Yes Bank up by 1.66% and Dr. Reddys Lab up by 1.51%. On the flip side, Vedanta down by 7.10%, ITC down by 4.54%, Larsen & Toubro down by 4.27%, Mahindra & Mahindra down by 3.89% and Bosch down by 2.98% were the top losers. (Provisional)

European markets were showing mixed trend, France’s CAC increased by 2.92 points or 0.06% to 4,888.74, Germany’s DAX gained 9.19 points or 0.09% to 10,810.03, while UK’s FTSE 100 declined by10.31 points or 0.16% to 6,385.49.

The Asian equity markets ended mostly in red on Friday, while reporting their strongest monthly performance in years in October. The Bank of Japan held off on expanding its massive stimulus programme, preferring to preserve its dwindling policy options in the hope that the economy can overcome the drag from China’s slowdown without additional monetary support. But the central bank is likely to remain under pressure to expand its already massive asset-buying programme as slumping energy costs, weak exports, and a fragile recovery in household spending keep inflation well short of its 2 percent target. Core consumer prices fell 0.1 percent in the year to September, a second monthly drop, while household spending slid even as job availability hit a two-decade high. The BOJ maintained its pledge to increase base money, or cash and deposits at the central bank, at an annual pace of 80 trillion yen ($662 billion) through aggressive asset purchases. South Korean Industrial Production rose to a seasonally adjusted annual rate of 2.4%, from 0.1% in the preceding month whose figure was revised down from 0.3%.

Taiwan’s economy shrank for the first time in six years in the July-September quarter, dragged down by worse-than-expected exports and domestic spending. The drop of 1.01 percent from a year earlier missed forecasts by the Directorate General of Budget, Accounting and Statistics, which had predicted GDP growth of 0.10 percent year-on-year in the third quarter. It has also announced that it would pour Tw$4.08 billion ($125.5 million) into the economy between November and February to boost consumer spending.